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Crisis persists in steel sector as Thyssenkrupp posts profit recovery

Thyssenkrupp Records Profit Recovery, Yet Remains in Steel Division Turmoil

Laborious Task at Hand
Laborious Task at Hand

ThyssenKrupp's Steel Division: Thriving Amidst Challenges and Progressing with Restructuring

Thyssenkrupp restores profitability – Persisting turmoil within Steel division - Crisis persists in steel sector as Thyssenkrupp posts profit recovery

Dive into the latest chapter of Thyssenkrupp's steel journey, as the company grapples with restructuring, job security, and financial performance.

Present-Day Scenario

Thyssenkrupp has struck a game-changing deal with IG Metall, ensuring no layoffs due to operational reasons, despite initial plans for job cuts. This pact forms part of a bigger strategy to revitalize the steel segment and boost its competitiveness.

Immediate Steps

  1. Steady as She Goes: The closure of the Kreuztal-Eichen plant in North Rhine-Westphalia is off the table for now. Instead, a location optimization concept will be put into action, with a verdict on the plant's future likely by 2027 or 2028.
  2. A New Lease on Life: The no-layoff pact with IG Metall signalizes a new era of stability for Thyssenkrupp's workforce amidst restructuring.

Towards the Future

  1. Preparing for the Future: The restructuring aims to equip Thyssenkrupp's steel division to thrive in the future. This entails implementing measures stemming from the APEX performance program to bolster operational efficiency.
  2. Steel Soldiers-in-Waiting: The resolution of wage agreements is of paramount importance for Thyssenkrupp to proceed with selling an additional 30% stake in its steel business to Czech billionaire Daniel Kretinsky.
  3. Material Makeover: Thyssenkrupp is mulling over options to divest its materials trading business, which may have a worth of up to €2 billion.

Financial Prospects

Thyssenkrupp has managed to wade back into the black, owing significantly to the sale of its Indian business, yet still faces tribulations in the European steel market. The company is committed to its restructuring initiatives, such as reducing the workforce and enhancing operational efficiency, to remain competitive.

Next Fiscal Year

Thyssenkrupp's steel division will continue restructuring endeavors in the upcoming fiscal year, focusing on boosting competitiveness and forging strategic relationships. The no-layoff pact with IG Metall serves as a beacon of workforce stability during this period. However, issues plaguing the European steel market and the necessity to settle wage disagreements to complete stake sales remain critical factors that could impact the division's future plans.

Vocational training programs could be incorporated into the community policy of Thyssenkrupp's steel division to further enhance the skills of its workforce, catering to the demands of the ever-evolving industry. With a well-trained workforce, Thyssenkrupp's steel division would be better positioned to compete in the global market, ensuring financial stability and fostering business growth.

Thyssenkrupp's strategic decision to sold an additional 30% stake in its steel business to Czech billionaire Daniel Kretinsky, based on the resolution of wage agreements, highlights the importance of finance in the restructuring process, as it could potentially provide the necessary capital for reinvestment in vocational training and modern technology.

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